HON

Honeywell International Inc.

Next est. report 2026-10-22 · BMO

Data Centers '25: Security, Electrical & Mgmt SystemsHumanoid '25: Industrial Automation OEMs World Cup '26: Security

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Overview

Honeywell International Inc. is a global technology and manufacturing company, now a pure-play automation leader. Its Building Automation segment creates smart

Honeywell International Inc. is a global technology and manufacturing company, now a pure-play automation leader. Its Building Automation segment creates smart structures, while Process Automation and Technology (enhanced by the Johnson Matthey acquisition) offers industrial control and specialized materials. Industrial Automation provides sensing and measurement solutions. Honeywell serves industrial plant operators, commercial buildings, and diverse global industries.

What They Do (Plain English & Analogies): Honeywell Technologies, or HON, acts like the "nervous system" and "brains" for large buildings and industrial operations. Imagine a huge factory or a modern skyscraper: Honeywell provides all the smart technology – the "eyes" (sensors), the "brain" (control software), and the "nerves" (connectivity) – that make everything run smoothly, safely, and efficiently. They help buildings manage energy, control access, and detect fires, and they help factories automate processes, ensure safety, and optimize production. They are now a "pure-play automation company" focused on making mission-critical environments more autonomous, productive, and safe by growing and monetizing their installed base through innovative services, software, and new products.
Very Brief History: Founded in 1906, initially focusing on furnace regulators (the first thermostats), Honeywell grew through decades of acquisitions into a large industrial conglomerate. A significant merger with AlliedSignal occurred in 1999. In recent years, the company has aggressively simplified its portfolio, culminating in the spin-off of its Aerospace business on June 29, 2026, and the divestiture of other non-core assets. This transformation has positioned Honeywell as a focused pure-play automation company.
"Street Stereotype": Honeywell has historically been seen as the "gold standard" of industrial management, known for its disciplined approach, "Six Sigma" efficiency, and consistent earnings. However, it also carried a stereotype of being a "slow-moving giant" with a complex structure. The current investor narrative is heavily focused on its "portfolio transformation" into a pure-play automation leader, with the market now attempting to value the sum of its parts as it sheds non-core businesses.
Subsidiaries On Linked In*: Honeywell Building Technologies — A core segment of the remaining Honeywell Technologies.; LinkedIn: honeywell-building-technologies
Honeywell UOP — Part of the Process Automation and Technology segment.; LinkedIn: honeywell-uop
Honeywell Forge — The company's enterprise performance management software platform.; LinkedIn: honeywell-forge
Honeywell Sensing and Industrial Measurement — Refocused segment after divestitures of Productivity Solutions and Services and Warehouse and Workflow Solutions businesses by early August 2026.; LinkedIn: honeywell-sensing-and-industrial-measurement
Johnson Matthey's Catalyst Technologies — Acquired on July 17, 2026, and integrated into the Process Automation and Technology segment.; LinkedIn: johnson-matthey-catalyst-technologies
Customer Sectors & Example Clients: Honeywell Technologies serves a broad range of customer sectors including Building Automation (data centers, healthcare, commercial buildings, hospitality), Industrial Automation (industrial equipment, utilities, oil and gas, semiconductor, manufacturing), and Process Automation and Technology (oil & gas, refining, petrochemicals, LNG, sustainable aviation fuel, life sciences). Example clients mentioned include Exxon, Dangote, Google, Equinix, and Duke Energy.
New Customers / Segments They'Re Targeting: Honeywell Technologies is actively increasing its exposure to higher-growth verticals. These include data centers, LNG (Liquefied Natural Gas), grid infrastructure, life sciences, hospitality, and semiconductor fabs. They are also looking at new business opportunities within data centers, such as on-site power generation automation and sensing for liquid cooling solutions.
Supply Chain And Sourcing Geographies: Honeywell operates a global supply chain with a "local for local" strategy. North American operations support the U.S. and Mexico, while Europe is served by European operations, and Asia primarily by China. The company has observed increased activity in "friend-shoring" with customers moving into ASEAN countries like Vietnam and Malaysia, as well as Poland and Turkey. Honeywell has invested over $1 billion in the past three years to expand its supply chain capacity and resiliency. The company acknowledges persistent inflation in electronics (memory), copper, and labor.
Sales Geographies And Expansion Plans: Honeywell Technologies sells its products and services globally. Major sales geographies include the United States, Europe, and 'Other International' regions. The company has strong sales in the Middle East and India, with double-digit growth in Building Automation in these regions. They are also seeing robust demand and project wins in the U.S., Brazil, and Africa, particularly for LNG and refining/petrochemical projects. Honeywell expects continued recovery in Europe and China for its Industrial Automation segment. The company is observing the build-out of data centers growing beyond the U.S., across Europe and Asia, which is a tailwind for them.
How Key Themes May Help/Hurt: The "Humanoid '25: Industrial Automation OEMs" theme, which focuses on the mass deployment of humanoid and humanoid-adjacent robots driven by AI, cost deflation, and teleoperation, presents a significant opportunity for Honeywell. As a pure-play automation company with a strong focus on industrial automation, sensing, and software (Honeywell Forge), HON is well-positioned to benefit. The theme's emphasis on AI-enabled embodied intelligence and increased industrial capital expenditure directly aligns with Honeywell's strategy of innovating in mission-critical environments where uptime, safety, productivity, and efficiency are paramount. Honeywell's sensors and control systems are critical components for advanced automation and robotics. The company's focus on outcome-based services and software, particularly through its Forge platform, can provide the "brains" and "nerves" for these increasingly autonomous industrial environments, driving recurring revenue growth. The theme's drivers like onshoring and labor shortages also create a favorable environment for increased automation adoption, which would boost demand for Honeywell's solutions in Industrial Automation and Process Automation.

3 Main Long-Term Bull Details

Focused Pure-Play Automation Leader: The successful completion of the Aerospace spin-off and the accelerated divestitures of Productivity Solutions and Services and Warehouse and Workflow Solutions businesses have transformed Honeywell into a pure-play automation company. This streamlined focus is expected to unlock significant shareholder value by enabling tailored capital allocation and a clearer strategic direction in high-growth automation markets.
Robust Backlog and High-Growth Verticals: Honeywell Technologies boasts a strong and increasing backlog, with organic orders growing 16% in Q2 2026, leading to a 9% increase in ending backlog. The company is strategically increasing its exposure to high-growth verticals such as data centers, LNG, grid infrastructure, and life sciences, which are linked to compelling megatrends and are driving significant orders growth across segments.
Strong Operational Execution and Software/Services Monetization: Honeywell consistently demonstrates strong operational execution, driving segment margin expansion (100 basis points in Q2 2026) through productivity, volume leverage, and accelerated stranded cost removal. The company's strategy focuses on monetizing its vast installed base through innovative software, services, and outcome-based solutions, aiming for a more meaningful shift towards services and software annual recurring revenue (ARR), with ARR growth expected around 15% for 2026.

3 Main Long-Term Bear Details

Geopolitical Volatility and Regional Impacts: The ongoing Middle East conflict has demonstrated the company's exposure to geopolitical risks, impacting Process Automation and Technology revenue and causing collection issues in pockets. While the situation has stabilized, any significant escalation or further disruption could introduce renewed volatility and execution risk to regional operations and project timelines.
Execution Complexity of Portfolio Transformation and Integration: While significant progress has been made, managing the final stages of divestitures (Productivity Solutions and Services, Warehouse and Workflow Solutions) and integrating new acquisitions like Johnson Matthey's Catalyst Technologies still presents execution complexity. Any unexpected costs, integration challenges, or delays could create earnings volatility and potentially dampen investor sentiment.
Sensitivity to Economic Cycles and Inflationary Pressures: Despite focusing on high-growth automation, the company remains sensitive to broader economic cycles, which can impact industrial capital expenditure. Persistent inflation in areas like electronics, memory, copper, and labor continues to be a headwind, requiring continuous pricing actions and productivity gains to offset.

Competitors And Differentiation: In its Building Automation business, Honeywell primarily competes with midsized companies that vary by region, rather than large multinationals. The company differentiates itself by leveraging its new products, innovation engine (including its Forge software platform), and common supply chain to gain market share. Its strategy focuses on growing its installed base and then monetizing it through innovative software, services, and outcome-based solutions. The recent acquisition of Johnson Matthey's Catalyst Technologies business aims to strengthen its portfolio in refining, petrochemicals, and renewable fuels by offering a more integrated solution and enhancing end-to-end solutions.
Recent Performance & What The Market'S Focused On: Honeywell Technologies delivered strong second-quarter 2026 results that surpassed expectations. Organic sales grew 4%, driven by continued strength in Building Automation (9% organic growth) and better-than-anticipated performance in Process Automation (down 1% organically, but ahead of outlook) and Industrial Automation (up 4% organically). Orders grew significantly by 16% organically across all segments, leading to a 9% increase in ending backlog and a book-to-bill ratio of 1.1 for the total company. Segment margin expanded by 100 basis points to 19%. As a result, Honeywell raised its full-year 2026 outlook for organic growth (to 3% to 4%), segment margin (250 to 290 basis points expansion), and adjusted earnings per share (to $8.20 at the midpoint). The company also successfully closed the acquisition of Johnson Matthey's Catalyst Technologies business and expects to close the divestitures of Productivity Solutions and Services and Warehouse and Workflow Solutions by early August, ahead of schedule. The market is focused on Honeywell's successful transformation into a pure-play automation company, the sustained outperformance of Building Automation, the anticipated sharp growth inflection in Process Automation and Technology in the second half of 2026, and the continued turnaround and improved financial performance in Industrial Automation. Investors are also closely watching the monetization of its installed base through software and services, and the company's ability to deliver on its long-term targets for growth, margin expansion, and EPS.

Revenue Segments And Estimated Mix: Building Automation — Mix: n/m for new HON; Source: Q2 2026 Earnings Transcript; Trend: Sales up 9% organically in Q2 2026, driven by double-digit growth in products and solutions, and strength across all regions. Expected mid-single-digit plus organic growth for the full year.
Industrial Automation — Mix: n/m for new HON; Source: Q2 2026 Earnings Transcript; Trend: Sales up 4% organically in Q2 2026, led by strength in solutions and slight growth in products (Sensing and Industrial Measurement). Core business (excluding divestitures) grew 2% organically in Q2. Expected up low single digits for the full year.
Process Automation and Technology — Mix: n/m for new HON; Source: Q2 2026 Earnings Transcript; Trend: Sales decreased 1% organically in Q2 2026, with projects up 5% (gas, LNG, petrochemicals) offset by a 6% decline in aftermarket due to tough prior year comparison. Expected to accelerate to high single digits in the second half, driven by backlog conversion and stronger catalyst shipments, leading to low single-digit growth for the full year.
Product Brands: UOP
Forge
Oleflex Technology
Petrochemical Technology
Connected Services
Advanced Digital Performance Monitoring
Operator Training
Experion PKS
Spectra Shield
Honeywell Connexo
Honeywell Forge Performance+ for Utilities
Quantum Origin
Nexus

Bull / Bear Details

Honeywell's investment case is strengthened by its successful transformation into a pure-play automation leader, marked by the completed Aerospace spin-off and

Thesis

Honeywell's investment case is strengthened by its successful transformation into a pure-play automation leader, marked by the completed Aerospace spin-off and accelerated divestitures. Strong Q2 2026 performance, robust orders, and the strategic Johnson Matthey acquisition underpin raised full-year guidance and confidence in sustained margin expansion. Despite persistent inflation and geopolitical uncertainties, the company's focus on high-growth verticals and operational execution makes the bull case compelling. (Updated: 2026-07-27)

Bull case

Honeywell's portfolio transformation is largely complete, with the Aerospace spin-off on June 29, 2026, and accelerated divestitures of Productivity Solutions and Services and Warehouse and Workflow Solutions by early August. The strategic acquisition of Johnson Matthey's Catalyst Technologies further strengthens the Process Automation and Technology segment, creating a focused automation pure-play.
Honeywell delivered strong Q2 2026 results with 4% organic sales growth and 16% organic orders growth, leading to a 9% increase in ending backlog. This momentum, driven by Building Automation's 9% organic growth and PA&T's 24% orders growth (LNG sold out for 3 years), supports raised full-year guidance and strong second-half acceleration.
Operational execution is driving significant margin expansion, with Q2 segment margin up 100 basis points and full-year guidance raised to 250-290 basis points, targeting over 22% exit margin. Accelerated stranded cost removal, Industrial Automation's expected 22% margin in Q4, and projected 15% Annual Recurring Revenue (ARR) growth contribute to robust profitability.

Bear case

The ongoing Middle East conflict, while normalizing, still impacted Q2 revenue and caused modest collection issues, introducing near-term volatility. Despite an expected second-half recovery, the situation could escalate or lead to further supply chain disruptions and project delays, affecting high-margin aftermarket revenue and overall regional performance.
The extensive portfolio transformation, including the integration of Johnson Matthey's Catalyst Technologies and the final divestitures, presents execution complexity. Unexpected costs, integration challenges, or difficulties in achieving optimal valuations for divested assets could create earnings volatility and dampen investor sentiment for the newly focused company.
Persistent inflationary pressures on key inputs like electronics, memory, copper, and labor could continue to challenge margin expansion, despite pricing actions. Additionally, increased competition in core automation markets, as Honeywell's strategies gain traction, may limit future market share gains and pricing power, impacting long-term growth.

Bull / Bear Case

Bear Case: The ongoing Middle East conflict, while normalizing, still impacted Q2 revenue and caused modest collection issues, introducing near-term volatility. Despite an expected second-half recovery, the situation could escalate or lead to further supply chain disruptions and project delays, affecting high-margin aftermarket revenue and overall regional performance. The extensive portfolio transformation, including the integration of Johnson Matthey's Catalyst Technologies and the final divestitures, presents execution complexity. Unexpected costs, integration challenges, or difficulties in achieving optimal valuations for divested assets could create earnings volatility and dampen investor sentiment for the newly focused company. Persistent inflationary pressures on key inputs like electronics, memory, copper, and labor could continue to challenge margin expansion, despite pricing actions. Additionally, increased competition in core automation markets, as Honeywell's strategies gain traction, may limit future market share gains and pricing power, impacting long-term growth. Process Automation and Technology sales declined 1% organically in Q2, with aftermarket down 6% due to tough prior-year comparisons, highlighting potential segment volatility.
Bull Case: Honeywell's investment case is strengthened by its successful transformation into a pure-play automation leader, marked by the completed Aerospace spin-off on June 29, 2026, and accelerated divestitures of Productivity Solutions and Services and Warehouse and Workflow Solutions by early August. The strategic acquisition of Johnson Matthey's Catalyst Technologies further strengthens the Process Automation and Technology segment. The company delivered strong Q2 2026 results with 4% organic sales growth and 16% organic orders growth, leading to a 9% increase in ending backlog. This momentum, driven by Building Automation's 9% organic growth and PA&T's 24% orders growth (LNG sold out for 3 years), supports raised full-year guidance and strong second-half acceleration. Operational execution is driving significant margin expansion, with Q2 segment margin up 100 basis points and full-year guidance raised to 250-290 basis points, targeting over 22% exit margin. Accelerated stranded cost removal, Industrial Automation's expected 22% margin in Q4, and projected 15% Annual Recurring Revenue (ARR) growth contribute to robust profitability. Long-term targets include approximately $12 of adjusted EPS, representing more than 10% annual growth, and over 90% free cash flow conversion.
More Compelling & Why: Bear. Despite strong Q2 results and an optimistic outlook from management, Honeywell appears 'Modestly Overvalued' with a Price-to-GF-Value of 1.24 and an EV/EBITDA of 13.69, which is 54% above its 10-year median and 55.3% above the industry median. This suggests the current price has already discounted much of the positive transformation. A significant and sustained miss on the projected high single-digit organic sales growth for Process Automation and Technology in the second half of 2026, or a material deterioration of the Middle East conflict leading to widespread project cancellations, would flip my view.

Key Factors5 rows

Key Factor	Why It Matters	What To Watch	What It Signals	Where/How To Track	Free Alt Data	Paid Alt Data
Achievement of Full-Year Segment Margin Expansion and >22% Exit Rate	This metric is a direct indicator of Honeywell Technologies' operational efficiency, successful integration of portfolio actions, and effective management of cost inflation, directly impacting overall profitability and EPS.	Full-year 2026 segment margin expansion (target 250-290 bps) and the reported segment margin for Q4 2026 (target >22%).	Bullish if full-year segment margin expansion is within or exceeds the 250-290 basis point guidance and the Q4 segment margin is above 22%, confirming strong operational performance and stranded cost removal.	Honeywell Technologies' Q3 and Q4 2026 earnings reports and conference call transcripts (expected late October 2026 for Q3, late January 2027 for Q4).	Company investor presentations and annual reports.	S&P Capital IQ: Consensus estimates for segment margins; FactSet/Bloomberg: Financial data for reported margins.
Industrial Automation (IA) Q4 Segment Margin Rate	IA's turnaround is a key margin expansion driver for the new Honeywell Technologies. Achieving the targeted 22% margin rate in Q4 would validate the effectiveness of the turnaround strategy and contribute significantly to overall profitability.	Industrial Automation segment margin reported for Q4 2026. Management expressed confidence in delivering a 22% margin rate in the fourth quarter.	Bullish if IA segment margin reaches or exceeds 22% in Q4 2026, indicating successful execution of the turnaround strategy, pricing actions, and productivity improvements.	Honeywell Technologies' Q4 2026 earnings report and conference call transcript (expected late January 2027).	Company investor presentations often highlight segment-specific margin trends.	FactSet/Bloomberg: Financial data for historical and projected segment margins.
Process Automation & Technology (PA&T) Second Half Organic Sales Growth	PA&T is a critical segment for Honeywell's automation strategy, and its projected sharp growth inflection to high single digits in the second half, driven by LNG and catalyst demand, is essential for meeting full-year guidance and validating the long-term thesis.	PA&T organic sales growth in Q3 and Q4 2026, specifically looking for high single-digit growth rates. Management commentary on LNG project conversion and catalyst shipment volumes.	Bullish if PA&T organic sales growth reaches high single digits in H2 2026, confirming backlog conversion and strong catalyst demand. Bearish if growth falls short or Middle East impacts persist materially.	Honeywell Technologies' Q3 and Q4 2026 earnings reports and conference call transcripts (expected late October 2026 for Q3, late January 2027 for Q4).	Industry reports on LNG project development and global catalyst market trends.	Wood Mackenzie: LNG project tracking and forecasts; Argus Media: Catalyst market analysis.
Completion of Productivity Solutions and Services (PSS) and Warehouse and Workflow Solutions (WWS) Divestitures	This marks the final step in Honeywell Technologies' portfolio transformation into a pure-play automation company, simplifying operations, enhancing focus on core growth areas, and removing revenue drag from divested assets.	Announcement of definitive closing dates for the sale of Productivity Solutions and Services and Warehouse and Workflow Solutions businesses. Management expects closure by early August 2026.	Bullish if both transactions close by early August 2026 as anticipated, confirming successful execution of portfolio simplification and strategic focus.	Honeywell Technologies' press releases, SEC filings (Form 8-K), and subsequent earnings call commentary. Expected by early August 2026.	Industry news outlets covering M&A in industrial technology, company investor relations website for news releases.	S&P Capital IQ: M&A transaction database for deal status updates.
Progress Towards 15% Annual Recurring Revenue (ARR) Growth for 2026	ARR growth is a direct measure of the success of Honeywell's 'software-industrial' strategy, demonstrating the monetization of its installed base through outcome-based services and software, which is crucial for long-term, predictable revenue streams.	Management commentary on ARR growth rates in Q3 and Q4 2026, and the reported full-year ARR for 2026 (target ~15% growth, from ~$900M to >$1B).	Bullish if ARR growth is on track for or exceeds 15% in 2026, indicating strong adoption of Forge-based offerings and successful new product launches.	Honeywell Technologies' Q3 and Q4 2026 earnings reports and conference call transcripts (expected late October 2026 for Q3, late January 2027 for Q4).	Company investor presentations often highlight software and services growth.	IDC/Gartner: Software market reports; Apptopia/Sensor Tower: App download/usage data (if applicable to specific software offerings).

Key Reported Metrics, Reratings Triggers & Results3 rows

This segment is crucial for Honeywell's second-half growth acceleration, with management expecting a sharp inflection to high single digits. Its performance wil

Key reported metrics			Rerating thresholds
Metric	Last period	Why it matters	What's needed for rerating	Rerating context	Earnings date
Process Automation Technologies Organic Sales Growth	-1%	This segment is crucial for Honeywell's second-half growth acceleration, with management expecting a sharp inflection to high single digits. Its performance will validate the company's ability to overcome prior headwinds and capitalize on the energy upcycle and LNG demand.	For the stock to rerate higher, Aerospace Technologies Organic Sales Growth for Q2 2026 needs to be high single-digit or better, meaning 8% or higher. This would demonstrate a significant recovery from the 3% organic sales growth reported in Q1 2026 and align with the company's prior guidance for the segment.	Achieving high single-digit or better Aerospace organic sales growth in Q2 would validate the recovery from Q1 supply chain constraints and confirm the successful execution of the Aerospace spin-off. This reinforces investor confidence in Honeywell's portfolio transformation and its ability to unlock value through strategic divestitures, positively impacting the perception of the remaining automation-focused entity.	2026-07-23
Building Automation Organic Sales Growth	9%	Building Automation has consistently outperformed and is a key driver of overall organic growth. Continued strong performance demonstrates the resilience and growth potential of this core, high-margin business, reinforcing the pure-play automation strategy.	For Honeywell International Inc. (HON) to rerate higher, its Building Automation Organic Sales Growth metric needs to hit sustained double-digit growth (10% or higher). The current value of 8% in Q1 2026 was already considered exceptional and surpassed expectations, with the company guiding for above-mid-single digit growth for the segment in 2026. An acceleration to 10%+ would signal stronger momentum and exceed current market expectations for this key segment.	Achieving sustained double-digit organic sales growth in Building Automation would strongly validate Honeywell's strategic transformation into a focused automation pure-play. It would demonstrate the resilience and accelerating growth potential of a core, high-margin business, particularly in high-growth verticals like data centers and healthcare, leading investors to assign a higher valuation multiple.	2026-07-23
Segment Margin Expansion	100 bps	Margin expansion is a critical component of Honeywell's profitability and EPS growth targets, driven by productivity, volume leverage, and accelerated stranded cost removal. Strong margin performance will validate the benefits of portfolio simplification and operational execution.

Key Questions

Will Honeywell successfully complete the divestitures of Productivity Solutions and Services and Warehouse and Workflow businesses by early August, and will the

Will Honeywell successfully complete the divestitures of Productivity Solutions and Services and Warehouse and Workflow businesses by early August, and will the integration of Johnson Matthey's Catalyst Technologies acquisition proceed smoothly to realize anticipated synergies?

Question 2: Can Process Automation and Technology (PA&T) deliver the projected sharp inflection to high single-digit organic sales growth in the second half of 2026, driven by backlog conversion and increased catalyst shipments, despite ongoing geopolitical uncertainties?
Question 3: Will Industrial Automation (IA) continue its turnaround, achieving sustained organic growth and demonstrating significant segment margin expansion, particularly towards the targeted 22% margin rate in Q4 2026, as new products and operational improvements take hold?

Earnings Transcript Summary3 rows

2026-07-23 · 2026Q2 Earnings Call

3 Things Management Is Most Focused On	Call Takeaway & Tone	Prior Quarter'S Y/Y Growth By Segment	3 Things Analysts Most Pressed On (And Mgmt Responses)	Revenue Segments
1. Portfolio Transformation: Management is focused on completing the portfolio transformation into a pure-play automation company, highlighted by the successful spin-off of Honeywell Aerospace, the anticipated closure of Productivity Solutions and Services and Warehouse and Workflow Solutions divestitures by early August, and the integration of Johnson Matthey's Catalyst Technologies acquisition. 2. Driving Growth and Monetization of Installed Base: A key focus is on growing and monetizing the installed base through outcome-based services, software, and new product innovation, particularly by increasing exposure to high-growth verticals like data centers, LNG, grid infrastructure, and life sciences. 3. Operational Execution and Margin Expansion: Management is committed to expanding segment margins through productivity, volume leverage, and accelerated stranded cost removal, which is tracking ahead of plan, to drive increased adjusted EPS and free cash flow conversion.	The call conveyed a confident and optimistic tone, emphasizing Honeywell Technologies' successful transformation into a pure-play automation company. Management reported strong second-quarter results that surpassed expectations, driven by broad-based demand across all segments and robust orders growth. The key takeaway was the company's increased full-year outlook for organic growth, segment margin, and adjusted earnings per share, supported by accelerated operational improvements, strategic portfolio actions, and a strong pipeline in high-growth verticals. Management expressed high confidence in achieving their long-term targets and continuing momentum into the second half of 2026 and beyond.	Building Automation: 8% organic growth in Q1 2026. Industrial Automation: 1% organic growth in Q1 2026. Process Automation and Technology: -6% organic decline in Q1 2026.	1. Middle East Impacts: Analysts inquired about collection issues and potential force majeure risks in the Middle East, despite strong orders. Management responded that collection issues were modest, not material, and largely normalized after March and April. They expect Middle East revenue to be high single digits and orders around 40% for the year, with business activity resuming to normal and large projects returning. 2. Johnson Matthey Deal: Analysts asked about the renegotiated lower price for Johnson Matthey's Catalyst Technologies business and the near-term integration plans. Management stated that the price negotiation was part of the normal course and expressed excitement about the strategic fit, commercial synergies (though not yet factored into early earnings), and strengthening the portfolio in petrochemicals and renewable fuels. 3. Industrial Automation (IA) Performance and Turnaround Strategy: Analysts pressed on the drivers of IA's upside, especially outside the U.S., and key performance indicators for improving execution. Management highlighted broad-based strength, including in China, Europe, and a recovering U.S. due to onshoring, noting 10% orders growth in Q2. They emphasized improved delivery performance (trending from mid-40s to high 80s percent) and new product launches as key to the turnaround, expecting IA to achieve a 22% margin rate in Q4.	Overall organic sales grew 4%. Building Automation sales grew 9% organically. Industrial Automation sales grew 4% organically (core business, excluding planned divestiture, grew 2% organically). Process Automation Technologies sales declined 1% organically.

2026-04-23 · 2026Q1 Earnings Call

3 Things Management Is Most Focused On	Call Takeaway & Tone	Prior Quarter'S Y/Y Growth By Segment	3 Things Analysts Most Pressed On (And Mgmt Responses)	Revenue Segments
1. Portfolio Transformation: Completing the Aerospace spin-off by June 29 (Q3) and divesting Productivity Solutions and Services and Warehouse and Workflow Solutions businesses in H2 2026, aiming for a more cohesive portfolio focused on three principal end markets. 2. Operational Execution and Margin Expansion: Driving margin expansion through pricing discipline, productivity, and accelerated stranded cost removal ahead of the Aerospace spin, which led to a 90 basis points margin expansion in Q1. 3. Navigating Geopolitical and Supply Chain Headwinds: Effectively managing the impact of the Middle East conflict on revenue (0.5% in Q1, 1% in Q2) and addressing temporary mechanical supply chain constraints in Aerospace to ensure sustained growth.	The call conveyed a tone of cautious confidence and resilience amidst significant portfolio transformation. Management highlighted strong Q1 results, exceeding expectations for segment margin and adjusted EPS, despite geopolitical complexities (Middle East conflict) and temporary supply chain constraints in Aerospace. The key takeaway was the accelerated progress on the Aerospace spin-off (now expected June 29, Q3) and other divestitures, positioning Honeywell as a pure-play automation company. While acknowledging near-term headwinds, management expressed strong confidence in achieving full-year guidance, driven by robust backlog conversion, pricing discipline, and a strong second-half ramp, particularly in Process Automation and Technology.	In Q4 2025, Aerospace organic growth was +11%. Building Automation organic growth was +8%. Industrial Automation organic growth was +1%. Energy & Sustainability Solutions (UOP) organic growth was -7%. Process Solutions organic growth was flat.	1. Aerospace Supply Chain Challenges: Analysts questioned the nature and impact of supply chain issues, especially in a low-volume quarter. Management (Jim Currier) responded that it was an acute, transitory issue with specific key mechanical suppliers in the Engines and Power Systems and Control Systems businesses, which adversely affected output in January and February. However, output improved considerably in March, and momentum carried into April, giving confidence in the high single-digit organic sales growth guidance for the year. 2. Q2 and Full-Year Margin Progression: Analysts inquired about the forecasted step down in Q2 margins and how it aligns with full-year expansion. Management (Mike Stepniak and Vimal Kapur) explained that the full-year margin expansion framework remains intact. The sequential Q2 pressure is due to an unfavorable mix from lower catalyst sales and the loss of high-margin revenue from the Middle East conflict. They reiterated confidence in delivering the full-year 20-60 bps expansion, with Aerospace margins expected to be roughly flat for the year. 3. Process Automation & Technology (PA&T) Organic Sales Ramp and Middle East Impact: Analysts sought clarity on the PA&T organic sales ramp given a tough first half and the Middle East conflict. Management (Vimal Kapur and Mike Stepniak) affirmed confidence in a strong second-half ramp (high single-digit growth) for PA&T, driven by a robust backlog (over $2 billion in project wins in the last 3 quarters) and expected catalyst demand. They acknowledged the near-term headwinds from the Middle East conflict but emphasized the long-term favorable outcome from potential rebuild opportunities and elevated oil prices.	Overall organic sales grew 2%. Building Automation sales were up 8% organically. Aerospace sales grew 3% organically. Industrial Automation sales were up 1% organically. Process Automation and Technology sales were down 6% organically.

2026-01-29 · 2025Q4 Earnings Call

3 Things Management Is Most Focused On	Call Takeaway & Tone	Prior Quarter'S Y/Y Growth By Segment	3 Things Analysts Most Pressed On (And Mgmt Responses)	Revenue Segments
1. Portfolio Transformation: Executing the spin-off of Aerospace (expected Q3 2026) and the divestiture of non-core businesses (PSS and Warehouse Solutions) to create simplified, pure-play entities. 2. Innovation-Driven Growth: Leveraging a step-up in R&D and New Product Introductions (NPI), which contributed 4% to organic growth in 2025, to capture higher-growth verticals. 3. Operational Efficiency: Converting the record $37 billion backlog into revenue while aggressively reducing 'stranded costs' from corporate spins to protect margins.	The call had a highly confident and transformative tone. Management successfully messaged that Honeywell is ahead of schedule on its massive portfolio simplification. The key takeaway is that despite pockets of short-cycle weakness in Europe and China, the company's record backlog and pivot toward high-growth sectors (Aerospace, Data Centers, and Quantum Computing) provide a clear path for 6-9% earnings growth in 2026. The acceleration of the Aerospace spin-off to Q3 2026 was a major positive highlight.	Aerospace: +10%; Building Automation: +3%; Industrial Automation: -5%; Energy & Sustainability Solutions: +1%. (Note: Q4 showed acceleration in Aerospace, Building Automation, and Industrial Automation, while Energy/UOP decelerated).	1. Margin Progression and Cadence: Analysts questioned the flat Q1 2026 margin outlook; Management responded that higher Quantinuum investments and seasonal tax/interest headwinds are front-loaded, with significant expansion expected in the second half. 2. Aerospace OE Contract Renewals: Analysts asked about the impact of long-term contract renegotiations; Management noted they are resetting 5-8 year old contracts to account for inflation, which will be a structural margin tailwind. 3. Quantinuum Commercialization: Analysts pressed for details on the IPO and cash burn; Management confirmed the confidential S-1 filing and highlighted the launch of the 'Helios' computer and partnerships with NVIDIA and JPMorgan as proof of commercial maturity.	Aerospace: +11% (organic, excluding Bombardier impact); Building Automation: +8% (organic); Industrial Automation: +1% (organic); Energy & Sustainability Solutions (UOP): -7% (organic); Process Solutions: Flat.

Transcript Tidbits4 rows

2026-07-23

About Expanding Eligible Market	About Competition	About The Broader Industry	Where Things Are Headed	Updates On Theme	Broader Themes Emerging	Bullish-Leaning Quotes (Short)	Bearish-Leaning Quotes (Short)	Hiring
Honeywell Technologies is expanding its eligible market by increasing exposure to higher-growth verticals such as data centers, LNG, grid infrastructure, and life sciences. The acquisition of Johnson Matthey's Catalyst Technologies business is expected to expand the installed base and strengthen the Process Automation and Technology (PA&T) portfolio across refining, petrochemicals, and renewable fuels. The company is seeing data center build-out growing beyond the U.S. into Europe and Asia, and its process automation business is participating in data centers by automating utilities and energy storage for on-site power generation. Additionally, there's an emerging opportunity for its sensing business in liquid cooling for data centers. Orders growth in Building Automation is being driven by data center, hospitality, and healthcare verticals, while PA&T is seeing growth from LNG and low-carbon energy/renewable fuels, and Industrial Automation is experiencing growth in semiconductor fabs. Investments in the Middle East are also pivoting towards logistics infrastructure, such as pipeline terminals and different shipping methods.	Honeywell's Building Automation business primarily competes with midsized companies that vary by region, rather than large multinationals, due to its business model of selling products through channels. The company benefits from market fragmentation and leverages its new products, innovation engine (including Forge), and common supply chain to gain market share. Management acknowledged that competition could respond to Honeywell's actions over the past two years, necessitating caution.	The broader industry is characterized by a complex geopolitical backdrop, particularly the Middle East conflict, which Honeywell assumes will persist without significant escalation or supply chain disruption. The company is operating in an 'energy up cycle,' with customer CapEx forecasts supporting the ongoing transition to LNG and renewable fuels. There's an expectation that the process market will see increased capital investment to de-risk the Middle East conflict situation. Macro tailwinds for the next several years include the proliferation of AI, increasing global energy demand, an aging population, and increased consumption. Persistent inflation is observed in electronics, memory, copper, and labor.	Honeywell Technologies is embarking on its next chapter as a pure-play automation company, focusing on growing and monetizing its installed base through outcome-based services, software, and new product innovation. The company is raising its full-year outlook for organic growth, segment margin, and adjusted EPS, expecting 4% to 6% organic growth in the second half of the year, aligning with its long-term targets. Adjusted EPS outlook has been raised by $0.10 at the midpoint. The divestitures of Productivity Solutions and Services and Warehouse and Workflow Solutions businesses are now expected to close by early August, approximately two months ahead of initial plans. Honeywell expects over 200 basis points of margin expansion from stranded cost removal, portfolio actions in Industrial Automation, and the aerospace trademark agreement, plus 60 basis points annually from operational margin expansion. The company is confident in achieving a 24% segment margin target and approximately $12 of adjusted EPS, representing over 10% annual growth. Cash conversion is expected to improve to over 90%, with a line of sight to 95% in the second half. Full-year organic sales growth outlook is increased to 3% to 4%, with Process Automation Technology growth accelerating to high single digits in the second half and Industrial Automation growth continuing. Full-year segment margin expansion is now expected to be 250 to 290 basis points, with Honeywell Technologies exiting the year above 22% segment margin. The M&A pipeline prioritizes strengthening the industrial automation, sensing, and measurement portfolio, accelerating growth in higher-growth verticals, and tuck-in tech acquisitions, with M&A activity primarily anticipated from 2027 onwards as the company focuses on debt retirement in 2026. The company is sold out on LNG for the next three years and expects its Annual Recurring Revenue (ARR) growth to be around 15% for 2026.	Industrial	Proliferation of AI, increasing global energy demand, aging population and increased consumption, energy up cycle, transition to LNG and renewable fuel, low-carbon hydrogen, sustainable aviation fuel, liquid cooling for data centers, behind-the-meter power generation for data centers.	The second quarter marked an important milestone for Honeywell Technologies as we began our next chapter as a pure-play automation company. We delivered 4% organic sales growth driven by continued strength in Building Automation and a better-than-anticipated performance. Orders grew 16% organically with broad-based demand across all segments, resulting in 9% increase in ending backlog. As a result today, we are raising our full year outlook for organic growth, segment margin and adjusted earnings per share. Our transformed and simplified portfolio is well positioned to outperform with momentum in both long-term and short-cycle orders. My team and I are highly confident in our ability to deliver on our 3-year commitments. We have clear visibility to both commercial and cost synergies and our long-term outlook for this business as part of Honeywell Technologies has not changed. Honeywell Technologies delivered strong results that surpassed our expectations. We now expect full year adjusted earnings per share of $8.20 at the midpoint or up approximately 27% versus prior year. We are pleased with Honeywell Technologies second quarter results, which enabled us to increase our 2026 outlooks across all key metrics. This, combined with our focus on increasing exposure on higher-growth verticals, driving annual recurring revenue growth from outcome-based services and software and maintaining our innovation engine will enable us to achieve double-digit annual adjusted EPS growth at greater than 90% free cash flow conversion. I remain optimistic to surprise everybody on the performance of the business in the second half. Our 2027 incrementally is looking stronger versus when we talked even last month. We are sold out LNG for the next 3 years.	Overcoming significant cost inflation headwinds and unfavorable mix. Offsetting the loss of income from the earlier-than-anticipated close of the 2 divestitures. Reduced our 2026 revenue expectation by approximately $400 million. Regarding the conflict, we are assuming the situation remains as it is today with no improvement from the current situation. Process Automation Technologies sales decreased 1% organically. Offset by a 6% decline in aftermarket due primarily to a tough prior year comparison from a large catalyst shipment in the second quarter of 2025. Process Automation Technologies segment, margin contracted 180 basis points to 22.1%, largely driven by unfavorable mix from lower catalyst volumes as expected. Partially offset by higher repositioning costs. A higher adjusted effective tax rate drove a $0.16 headwind. Ongoing collection headwinds in the Middle East. We did lose some revenue in Q1 and Q2 as we had guided. We observed some collection issues in pockets. They are modest. Inflation is stubborn. We see a lot of inflation in electronics, memory, obviously, copper, and we also see inflation in labor. Competition can respond to some of our actions over the last 2 years, and we need to be cautious.	Honeywell's team is comprised of Honeywell veterans, talented new additions, and some folks who rejoined after successful careers elsewhere. Ken and his leadership team are fully engaged with new colleagues from the Johnson Matthey acquisition, having met with over 90% of employees globally at key sites in the first week. The company maintained a heavily localized model in the Middle East, with all local employees remaining on the ground during the conflict. There is also mention of inflation in labor.

2026-04-23

About Expanding Eligible Market	About Competition	About The Broader Industry	Where Things Are Headed	Updates On Theme	Broader Themes Emerging	Bullish-Leaning Quotes (Short)	Bearish-Leaning Quotes (Short)	Hiring
Honeywell is expanding its eligible market through strategic acquisitions, such as the pending acquisition of Johnson Matthey's Catalyst Technologies business, expected to close by the end of July, which will broaden its portfolio and grow its installed base. The company secured a groundbreaking supplier framework agreement with the U.S. Department of War, representing a multibillion-dollar revenue opportunity in critical defense technology. Honeywell has secured over $2 billion in project wins across LNG, refining, petrochemicals, and sustainable aviation fuel in the U.S., Brazil, Africa, and the Middle East. Notably, Dangote Petroleum Refinery and Petrochemicals in Nigeria selected Honeywell for advanced technology services, proprietary catalysts, equipment, and connected services to double production capacity and enhance operations. The company also signed agreements for integrated LNG pretreatment and liquefaction solutions for major U.S. LNG export facilities. In Building Automation, sales growth was driven by strong demand for new products and momentum in high-growth data center and healthcare verticals, with double-digit sales growth in the Middle East and India. Honeywell is actively working on liquid cooling solutions for its Sensors business and power generation for behind-the-meter data centers, further penetrating the data center market. The company is very bullish on the LNG cycle, with demand for new capacity in the U.S. and diversification into regions like Africa.	Honeywell's Building Automation business primarily competes with midsized companies that vary by region, rather than large multinationals, due to its business model of selling products through channels and its project business being only about 15% of the overall segment. The company benefits from market fragmentation and leverages its new products, innovation engine (including Forge), and common supply chain to gain market share.	The broader industry is characterized by a complex geopolitical backdrop and temporary mechanical supply chain constraints in Aerospace. The Middle East conflict impacted Honeywell's Q1 revenue by approximately 0.5% and is expected to impact Q2 revenue by roughly 1%, primarily affecting Process Automation and Technology due to energy exposure and presence in the region. Despite this, demand for differentiated Process Technology remains strong globally. Favorable crack spreads in petrochemical and refining are expected to generate incremental catalyst and services demand, with the industry potentially benefiting from pent-up demand and stable feedstock supply once the conflict stabilizes. The Aerospace industry continues to see strong demand across commercial OE, commercial aftermarket, and defense and space. However, certain critical suppliers experienced temporary mechanical supply chain constraints in Q1, leading to a slowdown. Honeywell has invested over $1 billion in the past three years to expand supply chain capacity and resiliency. Increasing global defense needs are driving demand for replenishment and sustainment of missiles, munitions, and aircraft. Business aviation flight activity has shown strong resilient growth despite higher fuel prices. The Process market is currently clouded by war and disruptions, making it difficult to separate demand reality from the impacts of oil prices, supply shortages, and shipment delays. The LNG cycle is very bullish, with strong demand for new capacity and diversification.	Honeywell is progressing on its portfolio transformation, with the sale of Productivity Solutions and Services and Warehouse and Workflow Solutions businesses expected to close in the second half of 2026. The Honeywell Aerospace spinoff is now expected to complete on June 29, marking the final step in the transformation, positioning both Aerospace and Automation for future growth as independent leading industrial companies. The company expects accelerating growth in the second half, supported by its backlog in Process Automation and Technology. The acquisition of Johnson Matthey's Catalyst Technologies business is anticipated to unlock future growth by broadening the portfolio and creating a more integrated offering. Following the sales and spin, Honeywell will have a more cohesive portfolio focused on three principal end markets. Strength in the LNG vertical is expected to continue with additional projects in Q2, leading to a second-half ramp in Process Automation and Technology sales, followed by new catalyst demand in 2027. Honeywell is maintaining its Aerospace guidance of high single-digit organic sales growth for the year, with sequential improvement expected in Q2 driven by ramping OE production rates and higher defense spend. The company anticipates Q2 organic sales growth of 2% to 4%. Full-year organic growth outlook remains at 3% to 6%, with continued strength in Building Automation and recovery in Industrial Automation in Europe and China. Process Automation Technology is expected to be roughly flat for the year, with a strong second half. Full-year segment margin guidance is maintained at 22.7% to 23.1%, with an acceleration in stranded cost takeout ahead of the Aerospace spin. Quantinuum's results are expected to be de-consolidated in Q2. Honeywell will become a pure-play automation company, with Industrial Automation expected to be a margin expansion driver for the next year or so, and the overall LNG story remaining a high-growth vertical for the next few years.	Defense	Re-industrialization via militarization, energy security, liquid cooling for data centers, behind the meter power generation for data centers.	Honeywell delivered strong results in the first quarter, building on the momentum from 2025. Orders grew 7% organically on the strength of our Building and Industrial Automation segment. backlog to over $38 billion with book-to-bill above 1.1. expanded margin 90 basis points to over 23%. drove 11% adjusted earnings growth in the quarter. we expect to complete the Honeywell Aerospace spinoff in the third quarter on June 29, marking the final step in our transformation. This agreement demonstrates the criticality of Honeywell Aerospace to national security interest and supports a multibillion-dollar revenue opportunity. demand continues to be strong for differentiated Process Technology on a global scale. secured over $2 billion in project wins over the past 3 quarters. We expect strength in our LNG vertical to continue given the additional projects we expect to be awarded in quarter 2. We remain on track on expected second half ramp as LNG and large modular equipment deals convert to sales in the back half of the year. We continue to see strong Aerospace demand across commercial OE, commercial aftermarket and defense space. roughly $19 billion Aerospace backlog, a 20% increase from the prior year and 1.1 book-to-bill in the first quarter. We are maintaining our Aerospace guidance of high single-digit organic sales growth for the year. Building Automation surpassed our expectation once again in the first quarter with sales up 8% organically. Industrial Automation orders were up 10%, highlighted by strength in China and recovery in Europe. segment profit increased 6%, while segment margin expanded 90 basis points to 23.3% with margin expansion in all 4 segments. Adjusted earnings per share of $2.45 was up 11%. We're maintaining our organic growth outlook of 3% to 6% despite the temporary headwinds. We expect strength to continue in Building Automation, while Industrial Automation will continue to recover in Europe and China. Process Automation Technology should be roughly flat for the year as order visibility and robust backlog levels delivered a strong second half. our full year guide of high single-digit growth remains intact, driven by improvement in our supply chain observed in March. We are tracking ahead of schedule on our separation milestone with the Aerospace spin-off now expected to be completed on June 29. IA is going to be a margin expansion driver for us for the next year or so. Very, very bullish on LNG cycle.	complex geopolitical backdrop and temporary mechanical supply chain constraints in Aerospace. uncertainties surrounding the conflict in Middle East. Middle East conflict drove a roughly 0.5% impact to revenue for all of Honeywell. our guidance assumes the conflict persists through the end of the quarter and the resulting logistics and shipment delays cost a roughly 1% impact to revenue. certain critical suppliers experienced temporary constraints to start the year, which led to slowdown in January and February and lower output and sales growth. Process Automation and Technology sales were down 6% organically in the first quarter. Process Automation Technology will be slightly weaker than first quarter due to incremental pressure stemming from the Middle East conflict. mix pressure from catalyst sales or lack of catalyst cells in the second quarter. the loss of revenue we're having in Middle East is also high-margin revenue. mechanical supply chain over-delivered in the fourth quarter of 2025 enabling double-digit organic sales growth. However, certain critical suppliers experienced temporary constraints to start the year. The start of the quarter, however, was more acute in terms of the decline versus what we had anticipated. it was a very acute transitory issue specifically with some key suppliers in the mechanical space. most of our lost revenue was as a practical matter was aftermarket.

2026-04-23

About Expanding Eligible Market	About Competition	About The Broader Industry	Where Things Are Headed	Updates On Theme	Broader Themes Emerging	Bullish-Leaning Quotes (Short)	Bearish-Leaning Quotes (Short)	Hiring
Honeywell is expanding its eligible market through the pending acquisition of Johnson Matthey's Catalyst Technologies business, expected to close by the end of July, which will broaden its portfolio and grow its installed base. The company secured a groundbreaking supplier framework agreement with the U.S. Department of War, representing a multibillion-dollar revenue opportunity in critical defense technology. Honeywell has secured over $2 billion in project wins across LNG, refining, petrochemicals, and sustainable aviation fuel in the U.S., Brazil, Africa, and the Middle East. Notably, Dangote Petroleum Refinery and Petrochemicals in Nigeria selected Honeywell for advanced technology services, proprietary catalysts, equipment, and connected services to double production capacity and enhance operations. In Building Automation, sales growth was driven by strong demand for new products and momentum in high-growth data center and healthcare verticals, with double-digit sales growth in the Middle East and India. Honeywell is actively working on liquid cooling solutions for its Sensors business and power generation for behind-the-meter data centers, further penetrating the data center market. The company is very bullish on the LNG cycle, with demand for new capacity in the U.S. and diversification into regions like Africa.	Honeywell's Building Automation business primarily competes with midsized companies that vary by region, rather than large multinationals, due to its business model of selling products through channels and its project business being only about 15% of the overall segment. The company benefits from market fragmentation and leverages its new products, innovation engine (including Forge), and common supply chain to gain market share.	The broader industry is characterized by a complex geopolitical backdrop and temporary mechanical supply chain constraints in Aerospace. The Middle East conflict impacted Honeywell's Q1 revenue by approximately 0.5% and is expected to impact Q2 revenue by roughly 1%, primarily affecting Process Automation and Technology due to energy exposure and presence in the region. Despite this, demand for differentiated Process Technology remains strong globally. Favorable crack spreads in petrochemical and refining are expected to generate incremental catalyst and services demand, with the industry potentially benefiting from pent-up demand and stable feedstock supply once the conflict stabilizes. The Aerospace industry continues to see strong demand across commercial OE, commercial aftermarket, and defense and space. However, certain critical suppliers experienced temporary mechanical supply chain constraints in Q1, leading to a slowdown. Increasing global defense needs are driving demand for replenishment and sustainment of missiles, munitions, and aircraft. Business aviation flight activity has shown strong resilient growth despite higher fuel prices. The Process market is currently clouded by war and disruptions, making it difficult to separate demand reality from the impacts of oil prices, supply shortages, and shipment delays. The LNG cycle is very bullish, with strong demand for new capacity and diversification.	Honeywell is progressing on its portfolio transformation, with the sale of Productivity Solutions and Services and Warehouse and Workflow Solutions businesses expected to close in the second half of 2026. The Honeywell Aerospace spinoff is now expected to complete on June 29, marking the final step in the transformation, positioning both Aerospace and Automation for future growth as independent leading industrial companies. The company expects accelerating growth in the second half, supported by its backlog in Process Automation and Technology. Following the sales and spin, Honeywell will have a more cohesive portfolio focused on three principal end markets. Strength in the LNG vertical is expected to continue with additional projects in Q2, leading to a second-half ramp in Process Automation and Technology sales, followed by new catalyst demand in 2027. Honeywell is maintaining its Aerospace guidance of high single-digit organic sales growth for the year, with sequential improvement expected in Q2. The company anticipates Q2 organic sales growth of 2% to 4%. Full-year organic growth outlook remains at 3% to 6%, with continued strength in Building Automation and recovery in Industrial Automation in Europe and China. Process Automation Technology is expected to be roughly flat for the year, with a strong second half. Full-year segment margin guidance is maintained at 22.7% to 23.1%, with an acceleration in stranded cost takeout ahead of the Aerospace spin. Quantinuum's results are expected to be de-consolidated in Q2. Honeywell will become a pure-play automation company, with Industrial Automation expected to be a margin expansion driver for the next year or so, and the overall LNG story remaining a high-growth vertical for the next few years.	Defense	Re-industrialization via militarization, energy security, liquid cooling for data centers, behind the meter power generation for data centers.	Honeywell delivered strong results in the first quarter, building on the momentum from 2025. Orders grew 7% organically on the strength of our Building and Industrial Automation segment. backlog to over $38 billion with book-to-bill above 1.1. expanded margin 90 basis points to over 23%. drove 11% adjusted earnings growth in the quarter. we expect to complete the Honeywell Aerospace spinoff in the third quarter on June 29, marking the final step in our transformation. This agreement demonstrates the criticality of Honeywell Aerospace to national security interest and supports a multibillion-dollar revenue opportunity. demand continues to be strong for differentiated Process Technology on a global scale. secured over $2 billion in project wins over the past 3 quarters. We expect strength in our LNG vertical to continue given the additional projects we expect to be awarded in quarter 2. We remain on track on expected second half ramp as LNG and large modular equipment deals convert to sales in the back half of the year. We continue to see strong Aerospace demand across commercial OE, commercial aftermarket and defense space. roughly $19 billion Aerospace backlog, a 20% increase from the prior year and 1.1 book-to-bill in the first quarter. We are maintaining our Aerospace guidance of high single-digit organic sales growth for the year. Building Automation surpassed our expectation once again in the first quarter with sales up 8% organically. Industrial Automation orders were up 10%, highlighted by strength in China and recovery in Europe. segment profit increased 6%, while segment margin expanded 90 basis points to 23.3% with margin expansion in all 4 segments. Adjusted earnings per share of $2.45 was up 11%. We're maintaining our organic growth outlook of 3% to 6% despite the temporary headwinds. We expect strength to continue in Building Automation, while Industrial Automation will continue to recover in Europe and China. Process Automation Technology should be roughly flat for the year as order visibility and robust backlog levels delivered a strong second half. our full year guide of high single-digit growth remains intact, driven by improvement in our supply chain observed in March. We are tracking ahead of schedule on our separation milestone with the Aerospace spin-off now expected to be completed on June 29. IA is going to be a margin expansion driver for us for the next year or so. Very, very bullish on LNG cycle.	complex geopolitical backdrop and temporary mechanical supply chain constraints in Aerospace. uncertainties surrounding the conflict in Middle East. Middle East conflict drove a roughly 0.5% impact to revenue for all of Honeywell. our guidance assumes the conflict persists through the end of the quarter and the resulting logistics and shipment delays cost a roughly 1% impact to revenue. certain critical suppliers experienced temporary constraints to start the year, which led to slowdown in January and February and lower output and sales growth. Process Automation and Technology sales were down 6% organically in the first quarter. Process Automation Technology will be slightly weaker than first quarter due to incremental pressure stemming from the Middle East conflict. mix pressure from catalyst sales or lack of catalyst cells in the second quarter. the loss of revenue we're having in Middle East is also high-margin revenue. mechanical supply chain over-delivered in the fourth quarter of 2025 enabling double-digit organic sales growth. However, certain critical suppliers experienced temporary constraints to start the year. The start of the quarter, however, was more acute in terms of the decline versus what we had anticipated. it was a very acute transitory issue specifically with some key suppliers in the mechanical space. most of our lost revenue was as a practical matter was aftermarket.

2026-01-29

About Expanding Eligible Market	About Competition	About The Broader Industry	Where Things Are Headed	Updates On Theme	Broader Themes Emerging	Bullish-Leaning Quotes (Short)	Bearish-Leaning Quotes (Short)	Hiring
Honeywell is aggressively expanding its footprint in Quantum Computing through QuantiNu, which recently raised $840 million at a $10 billion valuation and launched 'Helios,' the world's most accurate commercial quantum computer. The company is also shifting toward high-growth verticals including data centers, healthcare, and life sciences. Strategic acquisitions in LNG process technology, compressor control, and defense technology are further broadening the addressable market, alongside the pending acquisition of Johnson Matthey's Catalyst Technologies business.	In the Aerospace sector, Honeywell is currently renegotiating long-term contracts with multiple OEs to reset pricing after 5-8 year cycles, aiming to offset historical inflation. In the Quantum space, the company claims its new Helios hardware sets a 'new standard' for fidelity and performance, positioning it to lead in commercial adoption for drug discovery and financial encryption over classical and rival quantum architectures.	The Aerospace industry is benefiting from a 'resilient supply chain' and increasing production rates in commercial air transport, alongside higher global defense spending. However, the petrochemical industry is currently facing 'overcapacity,' which is causing customers to defer catalyst shipments. Broader industrial trends show persistent inflation in labor (3-4%), electronics (specifically memory), and commodities like gold.	Honeywell is undergoing a massive portfolio simplification, with the Aerospace spin-off accelerated to Q3 2026. The company intends to sell its Productivity Solutions and Warehouse/Workflow businesses in 2026 to focus Industrial Automation on 'Sensing and Measurement.' For the full year 2026, Honeywell expects organic sales growth of 3% to 6% and adjusted EPS growth of 6% to 9%, driven by a record $37 billion backlog.	Industrial	Quantum-AI Convergence (integrating quantum computing with AI supercomputing via NVIDIA); Agentic AI (deploying autonomous 'agents' within the Honeywell Forge platform for building and process management); Decarbonization infrastructure buildup (driving growth in European building automation).	Orders up 23%, driving our backlog to over $37 billion.; Helios... sets a new standard for quantum computing performance.; We now expect the aerospace spin to occur in quarter three.; Aerospace... delivered stronger volumes enabled by supply chain improvements.	Lower petrochemical catalyst shipments... due to continued project deferrals.; Industrial automation... sales to be down low single digits to roughly flat.; Slower-than-expected aftermarket order rates for catalysts... influenced by overcapacity.; Weakness in short cycle Europe.

NotesTable

Date	Comment	Comment Type	Comment Sentiment	Link	Price Reaction
2026-04-23	Honeywell exceeded Q1 EPS/margin expectations and accelerated its Aerospace spin-off to June 29. Despite this, temporary Aerospace supply chain issues and Middle East conflict impacts on Process Automation led to modest organic sales growth. The market reacted negatively, with the stock underperforming SPY by over 3% post-earnings, suggesting disappointment with Q1 headwinds and cautious Q2 guidance, despite reaffirmed full-year outlook.	Earnings Transcript	Neutral		-3.09% (vs SPY: -3.65%)

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Catalyst ID	Estimated Timing	Estimated Date Start	Estimated Date End	Catalyst	Why It Matters	Ticker Or Theme Specific	Transcript Date	Source Type
HON_58ca664f	end of July	2026-07-31	2026-07-31	Closing of the acquisition of Johnson Matthey's Catalyst Technologies business.	This acquisition is expected to unlock future growth for Process Technology by broadening the portfolio, growing the installed base, and creating a more integrated offering for customers.	Ticker	2026-04-23	earnings_transcript
HON_5378a4fa	by early August	2026-08-01	2026-08-15	Closure of the divestitures of Productivity Solutions and Services and Warehouse and Workflow Solutions businesses.	This marks the final stage of Honeywell's portfolio transformation, driving greater focus and simplification of the Industrial Automation portfolio, and is expected to contribute to segment margin accretion.	Ticker	2026-07-23	earnings_transcript
HON_1d809be5	end of July	2026-07-01	2026-07-31	Completion of the acquisition of Johnson Matthey's Catalyst Technologies business by Honeywell.	This acquisition is expected to unlock future growth for Honeywell's Process Automation and Technology segment by broadening its portfolio and creating a more integrated offering for customers. Failure to close could impact growth prospects.	Ticker	2026-04-23	earnings_transcript
HON_47955441	in the fourth quarter	2026-10-01	2026-12-31	Industrial Automation (IA) segment to deliver a 22% margin rate.	Achieving this specific margin target indicates successful execution of the turnaround strategy within the IA segment, contributing significantly to overall company profitability and margin expansion.	Ticker	2026-07-23	earnings_transcript
HON_74921b1b	in 2027	2027-01-01	2027-12-31	Realization of new catalyst demand for the Process Automation and Technology segment.	This represents a future growth driver for the PA&T segment, building on the current backlog and expected second-half 2026 ramp.	Ticker	2026-04-23	earnings_transcript
HON_dd45d2f3	second half	2026-07-01	2026-12-31	Achievement of high single-digit organic sales growth in the second half for Honeywell's Process Automation and Technology segment, driven by LNG and large modular equipment deals converting to sales and new catalyst demand.	This ramp is critical for Honeywell to achieve its full-year organic growth outlook and demonstrates the conversion of its robust backlog into revenue, impacting investor confidence and future guidance.	Ticker	2026-04-23	earnings_transcript
HON_60aefcd0	second half of the year	2026-07-01	2026-12-31	Conversion of LNG and large modular equipment deals from backlog to sales in the Process Automation and Technology segment.	This conversion is a key driver for the expected high single-digit revenue ramp in PA&T in the second half of 2026, crucial for meeting the full-year flattish guidance for the segment.	Ticker	2026-04-23	earnings_transcript